Security agency clears Equity Bank, two firms seeking mobile licences

What you need to know:

  • Mobile Pay and Equity Bank are expected to use their newly acquired status to roll out services in the mobile finance space, competing directly with Safaricom’s offerings.

Three firms that have applied for mobile phone licences will know their fate in two weeks when the industry regulator is expected to make the final decision.

Equity Bank, Zioncell Ltd and Mobile Pay Ltd have all submitted applications to the CCK to be granted Mobile Virtual Network Operator (MVNO) licenses.

In an interview yesterday, Communications Commission of Kenya (CCK) director general Francis Wangusi said the National Intelligence Service (NIS) had given the go-ahead on the process, bringing the applicants closer to becoming the latest crop of Kenyan mobile operators.

“Actually, what remains is only one step. A technical committee of the CCK board will meet and decide whether to grant them the licences,” said Mr Wangusi.

The team is expected to meet and deliberate on the matter within the next two weeks.  The MVNO licensing regime would see these firms roll out services on an existing operator’s infrastructure.

Mobile Pay Ltd owns mobile money transfer platform Tangaza Pesa while Zioncell Ltd is an affiliate of Mobile Decisioning — a company that provides a range of mobile payment services, mostly targeting church-going youth.

Equity Bank has applied under its subsidiary Finserve Africa.

If the licences are granted, the entry of three new operators will be disruptive to a market that is currently dominated by Safaricom.  

Mobile Pay and Equity Bank are expected to use their newly acquired status to roll out services in the mobile finance space, competing directly with Safaricom’s offerings.

Since voice and data will not be their primary value propositions, there has been speculation that the MVNOs may offer the consumer lower tariffs.

“We have not got anymore MVNO applications but we would encourage other players to venture there. The more players we have, the better for the consumer,” said Mr Wangusi.

Reduction in MNOs
However, cheap offerings that the MVNOs may bring to the market are likely to be tempered by a reduction in the number of Mobile Network Operators (MNO).

Safaricom and Airtel have sought regulatory approval to acquire the assets of rival yuMobile as the Essar-owned firm exits the local market.
Last week, Telkom Kenya said it was reviewing its business model in Kenya.

Concerns over market dominance with the reduction of MNOs in Kenya have been raised by stakeholders.

The converse, which would be letting loss-making telecoms like yuMobile to liquidate, would also be detrimental as it would reduce investor confidence in the local market.

The potentially disruptive period that Kenya is going through had been predicted by a Deloitte analysis of the African market.

As subscription levels begin to level off, the company said that weak telecoms will exit African markets while dominant players would consolidate to strengthen their position.

Evolution of the African telecom market towards a niche-oriented strategy could also see more MVNOs set up in the continent’s more mature markets.

“Africa’s mobile market still has many unreached segments which could be addressed by MVNOs,” read the Deloitte report in part.
African firms currently make up about 0.5 per cent of MVNOs globally.

Some of the more notable MVNOs in the market include Virgin Mobile, Hello Mobile in South Africa and Set’Mobile in Cameroon.